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FTX Bankruptcy Advisors Share Client Data With FBI

Newly revealed court records show that Alvarez & Marsal, financial advisors involved in FTX’s bankruptcy proceedings, shared customer data, including transaction records, with law enforcement as part of investigations in progress.

Billing records for Alvarez & Marsal, the designated bankruptcy advisors, indicate that they provided this data in response to subpoenas from at least five Federal Bureau of Investigation (FBI) field offices across the states -United States, notably in Oakland, Portland, Philadelphia, Cleveland and Minneapolis.

The information disclosed to law enforcement included details obtained from specific customer transactions, account investigations and data from cloud computing.

Court documents reveal that some of the data obtained in September is associated with specific device identifiers. To access this data, advisors used FTX’s Amazon cloud service, where the exchange had stored its private keys.

Alvarez & Marsal also conducted investigations of customer accounts and transactions in July, as well as extracting customer information related to transactions in August.

Although it is confirmed that customer data has been shared, the exact extent of the information provided is not disclosed. Nonetheless, the bankruptcy court took steps to protect the identities of FTX customers following the Chapter 11 filing. This step was taken to protect customers from potential risks such as hacking, phishing and others related scams.

Despite concerns over data sharing, this highlights FTX’s cooperation with law enforcement. New FTX CEO John J. Ray III has reportedly been cooperating with law enforcement since taking office.

This development follows the recent conviction of former FTX CEO Sam Bankman-Fried by a New York court on November 2. Bankman-Fried was found guilty on all seven counts and is scheduled to be sentenced in March 2024, with the possibility of a lengthy prison sentence.

Published in: FTX, United States, Bankruptcy

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